WEST AFRICAN RESOURCES LIMITED For personal use only
Press Release
22 February 2022
WEST AFRICAN INCREASES UNHEDGED RESOURCES
127% TO 11.6 MILLION OUNCES GOLD
2022 production guidance 220,000 - 240,000 ounces at AISC of US$1040 - US$1100/oz
- 2022 unhedged gold production guidance: 220,000 - 240,000 oz at AISC of US$1,040 - 1,100/oz.
- Mineral Resources up 127 % on prior year to 302 Mt at 1.2 g/t for 11.6 million oz gold.. 1
- Ore Reserves up 13 % on prior year to 26 Mt at 2.0 g/t for 1.7 million oz gold. 2
- Sanbrado 10-year production outlook to average 198,000 oz gold per annum 2022 to 2031. 3
- Results of Kiaka feasibility study update on schedule for completion end Q2 2022.
- Company on track to a be a +400,000 ozpa gold producer by 2025.
- 2022 exploration drilling strike extensions at M1 South underground and oxide targets within trucking distance of the Sanbrado and Kiaka projects.
- Sanbrado Gold Operations unaffected by recent coup, continuing to operate as normal.
West African Executive Chairman and CEO Richard Hyde commented:
"Sanbrado's strong performance is set to continue in 2022 with unhedged production guidance of 220,000 to 240,000 ounces of gold at an AISC of US$1,040 to US$1,100 per ounce. The updated 10-year production outlook for Sanbrado is set to average 198,000 ounces gold per annum.
"The maiden Toega Ore Reserve estimate of 580,000 ounces of gold at 1.9 g/t gold replaces ore mined at since commissioning in 2020 and extends Sanbrado mine life out to 2034.
"The acquisition of the Kiaka Gold Project has increased the Company's resources 127% to 11.6 million ounces of gold and has consolidated an exciting 2,000 km2 exploration land package over in the prospective Markoyé fault region in central and southern Burkina Faso.
"Exploration drilling in 2022 will test targets along strike underground at M1 South and within trucking distance of Sanbrado and Kiaka, as we look to underpin long term production at both projects.
"West African Resources is entering a significant growth phase, as we aim to a be a +400,000ozpa gold producer by 2025."
1 Refer to Table 1 & 2 pages 3 & 4 for Mineral Resources details. Includes Kiaka project.
- Refer to Table 3 page 5 for Ore Reserve details. Does not include Kiaka project.
- The production target with the inclusion of M1 South Deeps contains Inferred Mineral Resources. An Inferred Mineral Resource has a lower level of confidence than an Indicated Mineral Resource and there is no certainty that further exploration work will result in the conversion of the material into an Indicated Mineral Resource or that the production target based on the Inferred Mineral Resource will be realised and if so, to what extent. Refer to Table 11 page 40 for further details.
Principal Office: Level 1, 1 Alvan Street, Subiaco WA 6008, Australia
T: + 61 8 9481 7344 F: + 61 8 9481 7355 E: info@westafricanresources.com www.westafricanresources.com ACN: 121 539 375
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West African Resources Limited
Overview
Unhedged gold mining company West African Resources Limited (ASX: WAF) is pleased to present its 2022 production and cost guidance, updated Resources, Reserves and 10-year production outlook for the Company's Sanbrado Gold Operations (Sanbrado) in Burkina Faso.
2022 Annual Guidance
2021 Actuals | 2022 Guidance | |||
Gold production (ounces) | 288,719 oz | 220,000 - 240,000 oz | ||
Adjusted operating cost (US$/oz)1 | $631/oz | $750 | - $830/oz | |
All-in sustaining cost (US$/oz)1 | $796/oz | $1,040 | - $1,100/oz | |
Capital development (US$ included in AISC) | $26 million | $35 - 45 million | ||
Sustaining capex and sustaining leases (US$ included in AISC) | $15 million | $15 | - $25 million | |
Corporate and share-based payments (US$ included in AISC) | $6 million | $7 | - $8 million | |
Growth expenditure (US$ Kiaka & Toega) | - | $45 | - $75 million | |
- 'Adjusted operating cost' and 'all-in sustaining cost' (AISC) are performance metrics recommended by the World Gold Council.
2 Average AUD/USD exchange rate: 0.7513 for 2021 actuals vs 0.7350 for guidance 3 Actual amounts in table are unaudited
During 2022, Sanbrado will enter its third year of operation. Gold production in 2022 is forecast to be lower than 2021 due to lower average open-pit grade resulting from the completion of the high-grade M1 open-pit during 2022. The 'all-in sustaining cost' per ounce is forecast to be higher than 2021 due to lower gold production, a planned cut back to final design on the M5 open-pit, capital improvement projects and inflation.
Open-pit capital development is forecast to increase in 2022, mainly due to a planned pit cutback at M5 (US$25-30 m). The cutback to the final pit limits on the southern section of the M5 pit increases the stripping ratio for 2022 to 6.7:1 (waste : ore) compared to the average for the remainder of the 10-year plan of 3:1. Capitalised underground mine development at M1 South is forecast to be in line with 2021.
Sustaining capital expenditure is forecast to increase in 2022, with several capital improvement projects being completed at Sanbrado including a gravity circuit upgrade, addition of an oxygen plant to reduce hydrogen peroxide consumption and improvements to the Sanbrado powerhouse. Other capital programs include continued expansion of the tailings storage facility and purchase of capital spares for the process plant. Sustaining capital expenditure is expected to normalise from 2023 onwards.
As feasibility studies and development of project schedules for the Toega and Kiaka projects are in progress, growth capital expenditure for 2022 is expected to be in a range from US$45 m to US$75 m. Early works have commenced at the Toega and Kiaka projects, and planned 2022 work programs include haul road, water pipeline and site establishment at Toega, while at Kiaka work will include upgrading access, establishment of camp facilities, sterilisation drilling as well as orders of long lead items. The Kiaka feasibility study is due to be completed by the end of Q2 2022, which will be followed by a formal investment decision soon thereafter.
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West African Resources Limited
Mineral Resources Update
Mineral Resource estimates were updated by independent resource consultants International Resource Solutions Pty Ltd (IRS) in accordance with JORC (2012) guidelines. The portion of M1 South Mineral Resources termed "M1 South Deeps" was updated by Neil Silvio who is an employee of the Company. Mineral resources have been estimated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code') 2012 edition. Mineral resources were estimated for the Project consisting of the following gold deposits: Mankarga 1 North (M1 North), Mankarga 1 South (M1 South), Mankarga 3 (M3), Mankarga 5 (M5), Toega which now forms part of the Sanbrado Gold Operation, and the newly acquired Kiaka deposit.
Table 1 - WAF Mineral Resources at 31 December 20211
Category | Tonnes | Grade (g/t) gold | Oz gold |
Measured | 5,700,000 | 2.9 | 529,000 |
Indicated | 217,000,000 | 1.1 | 7,537,000 |
Inferred | 79,000,000 | 1.4 | 3,600,000 |
Total | 302,000,000 | 1.2 | 11,600,000 |
1 Tonnes, grade and contained metal have been rounded to 2 significant figures to reflect the accuracy of the estimates. Rounding errors may occur.
WAF's Mineral Resources increased 127 % over the year since 31 December 2020. Key changes were:
- Depletion of Mineral Resources by mining activity;
- Infill drilling at Toega converted Inferred Mineral Resources to Indicated Mineral Resources; and
- Acquisition and estimation of the Kiaka deposit.
Figure 1 - WAF Mineral Resources growth since 2014
Ounces | 14,000,000 |
12,000,000 | |
Gold | 10,000,000 |
8,000,000 | |
Resource | |
6,000,000 | |
Mineral | 4,000,000 |
2,000,000 | |
0 |
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
A summary of the Mineral Resources by individual deposit is shown in Table 2 below.
An Inferred Mineral Resource has a lower level of confidence than an Indicated Mineral Resource and there is no certainty that further exploration work will result in the conversion of the material into an Indicated Mineral Resource.
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West African Resources Limited
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Table 2 - WAF Mineral Resources by deposit, 31 December 2021 | |||||||||||||
Measured Resource | Indicated Resource | Inferred Resource | Total Resource | ||||||||||
Cutoff | Tonnes | Grade | Contained | Tonnes | Grade | Contained | Tonnes | Grade | Contained | Tonnes | Grade | Contained | |
Au | Au | Au | Au | ||||||||||
g/t | t | g/t | oz | t | g/t | oz | t | g/t | oz | t | g/t | oz | |
M1 South | 0.5 | 20,000 | 5.5 | 4,000 | 60,000 | 3.6 | 7,000 | 0 | 0.5 | 0 | 80,000 | 4.2 | 11,000 |
M1 South UG | 1.5 | 800,000 | 13.4 | 346,000 | 1,600,000 | 7.3 | 370,000 | 250,000 | 5.9 | 48,000 | 2,620,000 | 9 | 760,000 |
M1 South Deeps | 1.5 | 2,060,000 | 12.4 | 820,000 | 2,060,000 | 12.4 | 820,000 | ||||||
M5 | 0.5 | 2,910,000 | 1.2 | 114,000 | 32,000,000 | 1.2 | 1,200,000 | 17,000,000 | 1.1 | 570,000 | 51,560,000 | 1.1 | 1,900,000 |
M1 North | 0.5 | 60,000 | 2.0 | 4,000 | 480,000 | 2.1 | 32,000 | 400,000 | 2.0 | 26,000 | 940,000 | 2.0 | 62,000 |
M3 | 0.5 | 160,000 | 1.7 | 8,000 | 30,000 | 2.1 | 2,000 | 0 | 0 | 0 | 190,000 | 1.7 | 11,000 |
Sanbrado Stockpile | 1,730,000 | 1.0 | 56,000 | 1,710,000 | 1.0 | 53,000 | |||||||
Toega | 0.5 | 13,130,000 | 1.7 | 698,000 | 8,350,000 | 2.1 | 569,000 | 21,000,000 | 1.8 | 1,300,000 | |||
Kiaka | 0.5 | 169,300,000 | 1.0 | 5,236,000 | 51,570,000 | 0.9 | 1,539,000 | 220,870,000 | 1.0 | 6,775,000 | |||
Total | 5,700,000 | 2.9 | 532,000 | 217,000,000 | 1.1 | 7,540,000 | 79,000,000 | 1.4 | 3,600,000 | 302,000,000 | 1.2 | 11,600,000 |
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West African Resources Limited
Ore Reserves Update
The Ore Reserves statement is reported according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code') 2012 edition. A gold price of US$1400/oz was used for open-pit and underground Ore Reserve estimation.
Table 3 - Sanbrado Gold Project Ore Reserves, 31 December 20211
Category | Tonnes | Grade (g/t) gold | Oz gold |
Proved | 5,600,000 | 2.6 | 460,000 |
Probable | 21,000,000 | 1.9 | 1,200,000 |
Total | 26,000,000 | 2.0 | 1,700,000 |
1 Tonnes, grade and contained metal have been rounded to 2 significant figures to reflect the accuracy of the estimates. Rounding errors may occur.
WAF's 31 December 2021 Ore Reserves increased by 13 % over the prior year. Key changes were:
- Inclusion of the Toega Ore Reserve of 580,000 oz
- Open-pitmining depletion of 210,000 oz
- Underground mining depletion of 113,000 oz
- RoM Stockpile balance increased by 18,000 oz from 2021 closing stocks
- Optimisation and redesign of the M5 final pit decreased Ore Reserves by 53,500 oz
Figure 2 - Sanbrado Ore Reserve Growth since 2014
1,800,000 | |
1,600,000 | |
Ounces | 1,400,000 |
1,200,000 | |
Gold | |
1,000,000 | |
Reserves | |
800,000 | |
Ore | 600,000 |
400,000 | |
200,000 | |
0 |
2014 | 2017 | 2018 | 2019 | 2020 | 2021 |
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West African Resources Limited published this content on 21 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 February 2022 21:20:00 UTC.
